New Appeals Court Decision Grants Protection Under Title VII for Sexual Orientation

On April 4, 2017, the U.S. Court of Appeals for the Seventh Circuit (“Seventh Circuit”) issued a landmark decision holding that discrimination on the basis of sexual orientation is prohibited under Title VII of the Civil Rights Act of 1964 (“Title VII”).[1] This means that, within the Seventh Circuit (which includes Illinois, Indiana, and Wisconsin), employers cannot treat workers differently based upon their sexual orientation. This ruling represents an extension of the rights guaranteed under Title VII for the past 53 years and is the first time that a federal appeals court has reached such a conclusion.

Title VII makes it unlawful for an employer “to fail or refuse to hire or to discharge any individual, or otherwise to discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual’s race, color, religion, sex, or national origin.”[2] In the case before the Seventh Circuit, the plaintiff, Kimberly Hively, was a former part-time professor for Ivy Tech Community College of Indiana (“Ivy Tech”). Ms. Hively applied for multiple full-time positions, for which she was not selected, and then her part-time contract was not renewed.

Ms. Hively, who is a lesbian, claimed that Ivy Tech failed to promote her and did not renew her contract, because of her sexual orientation. She filed a charge of discrimination with the Equal Employment Opportunity Commission (“EEOC”) and then a lawsuit in the district court. The district court dismissed her lawsuit on the basis that sexual orientation is not a protected class under Title VII, relying on previous decisions by the Seventh Circuit.

Ms. Hively then filed an appeal with the Seventh Circuit, and a panel of three circuit court judges affirmed the dismissal of her lawsuit, noting that it was bound by the court’s prior decisions. Subsequently, the court voted to rehear the case en banc (which means that it was ruled on by all eleven of the active Seventh Circuit judges; not just a panel of three).

In reaching its notable holding, the Seventh Circuit interpreted the meaning of “sex” in Title VII and “whether actions taken on the basis of sexual orientation are a subset of actions taken on the basis of sex.” It recognized that the U.S. Supreme Court has held that the prohibition against sex discrimination extends to sexual harassment (including same-sex harassment) and discrimination based on a person’s failure to conform to a certain set of gender stereotypes. The court noted that “a policy that discriminates on the basis of sexual orientation does not affect every woman, or every man, but it is based on assumptions about the proper behavior for someone of a given sex,” and that the “discriminatory behavior does not exist without taking the victim’s biological sex . . . into account.” The court therefore reasoned that discrimination on the basis of sexual orientation falls within Title VII’s prohibition against sex discrimination. As a result, the court overruled its previous cases and held that “a person who alleges that she experienced employment discrimination on the basis of her sexual orientation has put forth a case of sex discrimination for Title VII purposes.”

Of the panel of Seventh Circuit judges, three judges concurred with the majority opinion, and three judges dissented from the majority opinion. The dissenting judges concluded that the “ordinary, reasonable, and fair meaning of sex discrimination as that term is used in Title VII does not include discrimination based on sexual orientation.” They asserted that the result of the majority opinion is a “circumvention of the legislative process by which the people govern themselves.”

Indeed, not all circuits are in agreement with the Seventh Circuit. Even with the recent U.S. Supreme Court opinions that influenced the Seventh Circuit’s decision, federal courts still remain bound by their own precedent on the scope of Title VII. For example, less than a month before the Seventh Circuit issued its decision, the U.S. Court of Appeals for the Eleventh Circuit (“Eleventh Circuit”) issued an opinion on March 10, 2017 affirming that it could not recognize sexual orientation claims under Title VII.[3] In so doing, the Eleventh Circuit (which includes Florida, Georgia, and Alabama) relied upon a case from 1979 where it had previously ruled that “[d]ischarge for homosexuality is not prohibited by Title VII.”

This disagreement among the courts—referred to as a “circuit split”—means that the issue of whether Title VII encompasses sexual orientation is likely to be decided on appeal before the U.S. Supreme Court. As exemplified by the majority and dissenting opinions by Seventh Circuit in Ms. Hively’s case, the question of whether Title VII encompasses sexual orientation claims is, at its core, a matter of judicial philosophy on statutory interpretation. Thus, judges who believe a statute should be strictly interpreted—like the dissenting Seventh Circuit judges—are less apt to extend the protections of Title VII to sexual orientation. The U.S. Supreme Court includes a number of justices, including the recently-appointed Judge Neil Gorsuch, who are viewed by many as strict constructionists.[4]

The split, however, could be resolved by Congress, if it amends Title VII to explicitly include sexual orientation as one of the classes of individuals protected by the Act. In recent years, various bills have been introduced to prohibit discrimination on the basis of sexual orientation, but these bills did not pass.[5]

Nonetheless, even without a uniform resolution as to whether Title VII prohibits discrimination on the basis of sexual orientation, at least twenty states and several hundred counties and cities have enacted laws barring employers from discriminating against individuals on the basis of sexual orientation.[6] Additionally, in 2014, President Obama signed an Executive Order adding sexual orientation and gender identity protections for all federal workers and preventing federal contractors from discriminating on the basis of sexual orientation or gender identity.[7] Further, many private employers state in their employee handbooks or equal employment policies that they prohibit discrimination on the basis of sexual orientation. Also notable, since 2015, the EEOC, the federal agency tasked with enforcing Title VII, has taken the position that sex discrimination encompasses discrimination based on sexual orientation.[8]

While the EEOC’s
determinations are not inherently binding on employers (as the EEOC is an
executive agency and not a court), the EEOC can use its considerable resources
to bring lawsuits against companies who discriminate based on sexual
orientation under Title VII. Even in jurisdictions that have no precedent
establishing that Title VII covers sexual orientation discrimination, employers
facing EEOC lawsuits may be forced to endure considerable hassles and expenses
in litigating against the EEOC. Moreover, they would run the risk that their
jurisdictions could adopt the Seventh Circuit position and hold them liable
under Title VII.

In summary, one federal appellate court, many states and a variety of federal agencies now prohibit discrimination based on sexual orientation. Because some federal courts have not taken the position that such discrimination is illegal under federal law, it seems likely that the Supreme Court will have to make the ultimate determination. In the meantime, the trend is certainly in the direction of prohibiting employment discrimination based on sexual orientation and employers should act accordingly.